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McDonald’s has sued the four biggest beef producers in the US, alleging they conspired to drive up the price of meat paid by the world’s largest burger chain.
The lawsuit filed in federal court in New York follows similar litigation brought by cattle ranchers and supermarkets as well as federal probes into US cattle and beef markets. Cargill, JBS, National Beef and Tyson Foods were named as defendants.
The case pits two powerful industry groups against each other: McDonald’s, which serves millions of hamburgers a day, versus meatpackers whose slaughterhouses control the majority of US beef production capacity. McDonald’s is making its claims after a period of broad inflationary pressure that put it in politicians’ crosshairs.
In its civil lawsuit, McDonald’s claimed the meatpackers and alleged co-conspirators “engaged in a contract, combination or conspiracy in restraint of trade or commerce” in violation of antitrust law, with a goal to sell at prices “artificially higher than beef prices would have been in the absence of their conspiracy”.
Cargill, JBS, National Beef, Tyson Foods and McDonald’s did not immediately respond to requests for comment.
McDonald’s said one way in which beef companies had conspired was to suppress prices they paid for cattle fattened for slaughter, which propped up margins for the beef they sold. They “have exploited their pivotal role in the process of buying cattle to produce beef to collusively control upstream cattle pricing and downstream beef pricing” since at least 2015, the McDonald’s lawsuit alleged.
US plants slaughtered 32.8mn head of cattle in 2023, producing 27bn lbs of beef, according to the US Department of Agriculture.
McDonald’s is taking aim at some of its biggest wholesale suppliers with which it has had relationships going back decades. The fast-food giant had US revenue of $10.6bn last year, or about 41 per cent of global revenue.
Its lawsuit follows proposed class-action cases filed by cattle ranchers and beef customers against large packing companies. New York-listed Tyson has disclosed receiving requests for information on the cattle and beef packing markets in 2020 and 2021 from the US Department of Justice’s antitrust division.
Federal antitrust authorities have also investigated price-rigging allegations in the poultry market. In 2021, Pilgrim’s Pride, which is majority owned by Brazil-based JBS, pleaded guilty and was ordered to pay $107mn in fines over a conspiracy to fix prices for broiler chickens.
Like most restaurant chains, McDonald’s raised prices in the years following the pandemic in the face of labour shortages and supply disruptions. But it has more recently offered new discounts to win back customers put off by inflation.
https://www.ft.com/content/23b9ebc5-3d1b-4882-b6ef-96184cc1413a
